5. In Home and Foreign, there are two factors each of production, land, and labor used to...
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5. In Home and Foreign, there are two factors each of production, land, and labor used to produce only one good. The land supply in each country and the technology of production are exactly the same. The marginal product of labor in each country depends on employment as follows:
Number of Workers Employed Marginal Product of Last Worker 1 30 2 29 3 28 4 27 5 26 6 25 7 24 8 23 9 22 10 21 11 20 Initially there are 11 workers employed in Home, but only 5 workers in Foreign.
Find the effects of free movement of labor from Home to Foreign in employment, production, real wages, and the income of landowners in each country.
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Related Book For
International Finance Theory And Policy
ISBN: 9781292238739
11th Global Edition
Authors: Paul R. Krugman, Maurice Obstfeld, Marc Melitz
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